SpiceJet pares gains, falls over 8% as oil companies stop fuel supply

NEW DELHI: After rallying a little over 7 per cent in trade on Wednesday, shares of SpiceJet came under pressure and plunged as much as 8.2 per cent in trade on reports that oil companies have stopped fuel supply thus halting operations of the airliner.

SpiceJet operations grounded as oil companies stop fuel supply, PTI reported quoting Airport sources earlier today.

At 09:50 a.m.; SpiceJet was still trading 3.6 per cent lower at Rs 13.40. It hit a low of Rs 12.75 and a high of Rs 14.95 in trade today.

SpiceJet Ltd rallied as much as 7.5 per cent earlier trade, after the civil aviation ministry pushed for a bailout, calling on banks to give the carrier up to Rs 600 crore in working capital loans.

The working capital loan will help it tide over the crisis until the airline can tie up long-term investment, which is expected to come through in eight weeks.

This came a day after Spice-Jet got a reprieve based on assurances from the promoters to guarantee loans. Before the evening announcement by the ministry, the promoters seemed to be frustrated by banks not being keen on providing loans after their experience with the grounded Kingfisher Airlines, which defaulted on debt.

On Tuesday, the ministry allowed SpiceJet to open bookings until March 31, relaxing the advance-booking limit of one month that had been imposed on December 5, ET reported.

The ministry also asked the Airports Authority of India (AAI) and oil companies to provide the airline 15 days to pay its dues, added the report.

The carrier's financial woes aren't as bad as those of Kingfisher, ET reported quoting a Sun Group executive. SpiceJet's short-term loans - those not backed by aircraft - add up to just Rs 230 crore, "much lesser than Kingfisher's Rs 7,800 crore", according to the executive. SpiceJet's total long-term liabilities, including dues to lessors, is Rs 2,000 crore.